Despite the evidence suggesting that the TGF-beta signaling pathway is an important tumor suppressor in TGF-beta sensitive cells, overexpression of TGF-beta protein by TGF-beta resistant cancer cells may actually enhance tumorigenicity in certain instances. It has been theorized that the immune system's tumor surveillance function is locally impaired by tumor cell secretion of TGF-beta. In addition to immune suppression, TGF-beta supports local matrix synthesis which may further enhance tumor viability. We investigated the mechanism by which TGF-beta expression is upregulated in transformed and malignant cells. Previously, we have found a perfect correlation between patterns of expression of Hbx and TGF-beta1 by immunohistochemical analysis of liver sections from Hbx- expressing transgenic mice supporting the existence of a direct association between these two proteins. We also demonstrated that Hbx transactivates the TGF-beta1 promoter through specific Egr-1 binding sites. We have further shown that the Egr-1 protein associates with the Hbx protein and that this interaction is required for Hbx to participate in transcriptional regulation of immediate-early genes. These findings suggest that Hbx expression associated with HBV infection induces TGF-beta1 which then contributes to the pathologic conditions associated with HBV infection. We have discovered that cytomegalovirus (CMV) infection induces expression of TGF-beta1. We have demonstrated that two discrete Egr-1 sites are essential for mediating CMV IE2 transactivation of the TGF-beta1 promoter. In vitro binding assays have revealed that IE2 protein binds directly to an Egr-1 protein through the zinc finger domain. The region of the IE2 protein involved in interactions with Egr-1 appears to be located within the C-terminal portion adjacent to the DNA-binding and dimerization domains. We have shown that IE2 activates transcription of TGF-beta1 via direct interaction with the Egr-1 DNA-binding protein, suggesting that transactivation of other IE2 regulated promoters is similarly mediated through this general transcription factor protein.